United Nations Conference on Trade and Development 2011 igc.int Grains Trade Convention (GTC) •...
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United Nations Conference on Trade and Development 10th MULTI-YEAR EXPERT MEETING ON COMMODITIES AND DEVELOPMENT 25-26 April 2018, Geneva Assessing the recent past and prospects for grains and oilseeds markets in 2018/19 By Darren Cooper International Grains Council The views expressed are those of the author and do not necessarily reflect the views of UNCTAD.
Transcript of United Nations Conference on Trade and Development 2011 igc.int Grains Trade Convention (GTC) •...
United Nations Conference on Trade and Development
10th MULTI-YEAR EXPERT MEETING ON COMMODITIES AND DEVELOPMENT
25-26 April 2018, Geneva
Assessing the recent past and prospects for grains and oilseeds markets in 2018/19
By
Darren Cooper
International Grains Council
The views expressed are those of the author and do not necessarily reflect
the views of UNCTAD.
IGC 2011
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igc.int
United Nations Conference on Trade and DevelopmentMulti-year Expert Meeting on Commodities and Development
10th session
Geneva25-26 April 2018
Darren Cooper
International Grains Council
Assessing the recent past and prospects for grains and
oilseeds markets in 2018/19
Some tentative observations
IGC 2011
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Grains Trade Convention (GTC)
• Information sharing, analysis and data on global markets for wheat, coarse grains,
rice and oilseeds
• Commodity coverage has expanded significantly in recent years
➢ Rice included in the definition of “grains” in the GTC from 1 July 2009
➢ Oilseeds formally included from 1 July 2013
• Monitoring of national policy developments
Food Assistance Convention (FAC) • Its objectives are to save lives, reduce hunger and improve food security, while
enhancing the nutritional status of the most vulnerable populations
http://www.foodassistanceconvention.org/
The International Grains Council (IGC)
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IGC 2011
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IGC daily grains and oilseeds index (GOI), January 2000 = 100
+ 18%
Markets for grains, rice and oilseeds post solid gains,
particularly during the early months of 2018
For further information, see: www.igc.int/grainsupdate/igc_goi.xls; * refers to year-on-year change
IGC GOI is a weighted index, including 34 fob export quotations across a range of origins, spanning eight commodities
IGC 2011
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igc.intGains have been broad based – in general,
a combination of production worries and export demand
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Soybeans
Wheat
Maize
IGC daily sub-indices, rebased: 17 Apr 2017 = 100
Rice
Wheat: Markets have been volatile
over the period, with a particularly
sharp spike in prices in mid-2017, tied
to high-protein grades. In 2018, prices
climb on US Plains dryness, some
worries in the EU/CIS and logistics.
Maize: Supported by concerns about
South American crops, coupled with
robust demand for US supplies. Buying
interest in Ukraine also firm.
Soyabeans: Displays considerable
volatility, with dwindling crop prospects
in Argentina a major factor. But there
have been headwinds – huge crop in
Brazil and heightened worries about
US-China trade.
Rice: Strength tied to firm export
demand, especially from Asian buyers,
as well as tighter supplies in major
exporters.
IGC 2011
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igc.intSentiment reflected by changes in traders’ net
positions – noting the soyabean complex shift
CME Wheat KCBT WheatMGE Wheat
CME Soyabeans CME Corn
Net long Net short
CME Soyameal
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IGC 2011
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igc.intDuring a key phase of development, conditions in
Argentina have remained hot and dry
Precipitation anomaly Temperature anomaly
IGC 2011
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igc.intGlobal markets strengthen on Argentine crop
worries, with particularly sharp gains in soyameal
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IGC GOI soyabeans sub-Index, Jan 2000 = 100Soyabean export prices
US$/t % Chg. % Chg.
fob 1 Jan y/y
Argentina 423 +62 +21
Brazil 431 +52 +20
USA 321 +49 +16
Soyameal
US$/t % Chg. % Chg.
fob 1 Jan y/y
Argentina 429 +94 +36
Brazil 431 +111 +38
USA 457 +116 +32
Soyabean oil
US$/t % Chg. % Chg.
fob 1 Jan y/y
Argentina 753 -17 +9
Brazil 746 -13 +7
USA 725 -58 +1
Share of
Argentina
in trade *
7%
43%
46%
* 5-year average
IGC 2011
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igc.int2017/18 soyabean production – Brazil’s crop
continues to get larger, Argentina’s gets smaller
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m t Argentina
2017/18 Chg.
from Oct to Mar
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m t Brazil
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m t USA
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Average
Average- 13.0
IGC 2011
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igc.intFurther gains in global acreage projected for 2018/19
– again led by major producers
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m haWorld harvested area
Average
(est.) (f’cast) (proj.)
Key points m ha y/y
USA 36.6 + 1%
Given current soy prices relative to other crops, such
as maize, acreage gains possible, but limited by
rotational needs?
Canada 3.0 + 2%
Further modest increase in plantings likely, to new
record, but less pronounced than in 2017/18.
China 8.4 + 4%
Tied to continued aim of reducing grains (maize)
plantings in marginal areas, soy sowings to expand.
Ukraine 1.9 - 5%
Reports of reduced margins could discourage some
farmers from boosting area.
South America 59.4 + 3%
Tentative, and linked to northern hemisphere crop
outcomes. Anticipate gains in Brazil, some recovery
in Argentina on rotational needs and lower export
taxes.
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Heavy availabilities, especially in the USm t
Argentina
Brazil
World soyabean supply & demand situation and
prospects - US stocks at 11-year high in 2017/18
US
➢ 2017/18 world outturn smaller, but second largest
of all time, but to recover in 2018/19?
➢ Total use seen at a new peak, rising by 3% y/y.
➢ Trade to advance to a record of 153m t on growing
Asian needs.
➢ Stocks to tighten in the major exporters in 17/18
and 18/19 – we see a reverse of the situation from
recent past. US stocks now expected to be ample,
but heavy drawdowns likely in South America.
m t
15/16 16/17 17/18 18/19 y/y
(est.) (f'cast) (proj.) change
Opening stocks 34 33 47 42 - 10.6%
Production 315 350 341 354 + 3.6%
Total supply 350 383 389 396 + 1.9%
Total use 317 335 347 358 + 3.1%
of which: Crush 280 295 306 316 + 3.2%
Closing stocks 33 47 42 39 - 8.8%
Major exportersa)
16 23 19 16 - 11.5%
Trade (Oct/Sep) 134 147 153 159 + 4.0%
a) Argentina, Brazil and US
IGC 2011
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igc.intAs with soy in Argentina, difficult weather impacts
maize crops in the southern hemisphere
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m t
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ave.
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m t South Africa
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igc.int2018/19 world maize area projected to be flat
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m haWorld harvested area
(est.) (f’cast) (proj.)
Key changesm ha y/y
Ukraine 4.3 -3%
Poor results in 2017/18 and reduced profitability
expected to discourage some farmers.
USA 33.2 -1%
Amid comparatively better soyabean returns,
maize area could drop y/y. However, any decline
likely to be capped by rotation requirements.
China 35.2 -1%
Despite strong local prices, policy changes to lead to
a third consecutive decline in area.?
Russia 2.9 +5%
Area expected to continue its upward trend.
Abandonment projected to be lower y/y.
Average
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18/19(proj.)
A tighter situation anticipatedm t
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China
Global maize supplies set to tighten in 2018/19,
led by falls in China and major exporters
Argentina
US
Brazil
m t
15/16 16/17 17/18 18/19 y/y
(est.) (f'cast) (proj.) change
Opening stocks 284 295 337 308 - 8.7%
Production 984 1,088 1,045 1,052 + 0.7%
Total supply 1,268 1,382 1,382 1,360 - 1.6%
Total use 974 1,046 1,074 1,094 + 1.9%
of which: Food 113 119 121 122 + 1.0%
Feed 561 604 621 632 + 1.6%
Industrial 267 280 295 303 + 2.5%
Closing stocks 295 337 308 265 - 13.7%
Major exportersa)
59 81 73 58 - 21.0%
Trade (Jul/Jun) 136 138 149 150 + 0.7%
a) Argentina, Brazil, Ukraine, USA
➢ Production to edge lower, with tentative rebounds
in South America contrasting with a fall in the US.
➢ Feed and industrial needs to drive consumption
higher.
➢ Further tightening of stocks likely in 2018/19, on
drawdowns in China and major exporters.
➢ Trade seen little changed y/y, at a peak of 150m t.
Feed demand to underpin large imports across a
number of regions.
IGC 2011
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igc.intA third consecutive drop in
world wheat area is projected in 2018/19
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m ha World harvested area
(est.) (f’cast) (proj.)
Average
Key changesm ha y/y
N & C America 25.5 +2%
Increased spring wheat area forecast in Canada
and the USA.
Europe 26.7 -1%
Sowings in parts of Northern Europe were limited
by overly wet soils during planting.
CIS 49.6 -1%
Not all planned winter grain area was sown in
Russia. Planting weather in Ukraine was better
compared to the previous two years.
North Africa 6.8 -6%
Earlier dryness in Morocco expected to have
restricted seedings.
Far East Asia 67.5 -2%
Despite high support prices, sowings in India seen
4% lower y/y, with some area switched into pulses.
IGC 2011
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18/19(proj.)
Major exporters’ stocks tighterm t
China
Major exporters
m t
15/16 16/17 17/18 18/19 y/y
(est.) (f'cast) (proj.) change
Opening stocks 207 224 240 256 + 6.7%
Production 737 754 758 741 - 2.2%
Total supply 945 978 998 997 - 0.1%
Total use 720 738 742 744 + 0.3%
of which:Food 491 499 509 517 + 1.6%
Feed 142 151 146 142 - 2.7%
Industrial 22 22 23 23 + 0.0%
Closing stocks 224 240 256 253 - 1.2%
major exportersa)
66 75 78 66 - 15.4%
Trade (Jul/Jun) 166 176 174 179 + 3.0%
➢ Production seen 2% lower but, due to high carry-
ins, supplies close to peak levels.
➢ Food demand to underpin consumption growth
➢ Leaving aside nominal inventories in China, major
exporters’ stocks set to tighten
➢ Global trade likely to advance to a new high of
179m t, with bigger purchases by Iran and India
notable.
World wheat supply & demand
situation and prospects
a) Argentina, Australia, Canada, EU Kazakhstan, Russia, Ukraine, US
IGC 2011
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igc.intWheat trade potentially at a new high in 2018/19,
with share of Black Sea exporters staying elevated
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Asia & Africa at about 80% of trade Black Sea volumes close to record in 18/19?
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2008 2010 2012 2014 2016 2018(f'cast)
Average
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2008 2010 2012 2014 2016 2018(f'cast)
Far East Asia
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2008 2010 2012 2014 2016 2018(f'cast)
Other importers
Average
m t (milled basis)
Sub-Saharan Africa
m t (milled basis)
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Rice trade to stay high in 2018, at close to 46m t
– compares to 41m five-year average
IGC 2011
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igc.intIndia to remain the biggest exporter in 2018, taking
market share from Thailand?
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Thailand
India
m t (milled basis)
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2008 2010 2012 2014 2016 2018(f'cast)
m t (milled basis)
Vietnam
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2008 2010 2012 2014 2016 2018(f'cast)
m t (milled basis)
ChinaWill this trend
be sustained?
IGC 2011
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igc.intWorld rice stocks kept high by accumulation in
China...but those available to world market tighten
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Thailand
India
m t (milled basis)
Others *
* Pakistan, USA, Vietnam
…Stocks in Thailand to fall to a decade low?
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Major exporters
China
m t (milled basis)
World stocks seen steady y/y…
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